Is this really how tax preparers do it, fudge factor? Poll!

[lendaddy]

Ok, I have always done my own taxes. Even with two side businesses I never found it that difficult and actually took a little pride in doing it. I have it down to maybe 3-4 hours and I'm happy.

Well anyway I spoke to a few guys this year that have theirs done just to compare results..........HOLY CRAP!!

These accountants have HUGE balls. H&R Block told one of my buddies he could write of the entire cost of his popup camper because he opens it up and lets the kids play in it! (his wife does daycare). He wrote off his underground sprinkling, all home improvements, etc.... In the end, a couple who gross near $100k a year ended up getting EITC of $1,500!! For those that don't know what that means, he got everything he paid back AND a check from you and me for $1,500 cause he is so poor???!!!????

Another buddy frames houses as a sub contractor. He described hi interview with an accountant as:

ACC- So do you use your truck for work, if so what percent? How many miles, and any repairs?

Buddy- Yes, 35%-40%, 18k miles, and maybe $600 in repairs.

ACC- Ok, so we have 60%, 26k miles, and $1,450 in repairs. Now moving on to your home office......

Sweet ass guys is this how it really goes? I have gotten roughly the same story from 3 people.

[TerryBPP]

I plead the 5th

[BlueSkyJaunte]

Hm...and I was worried because I forgot to account for $200 in dividends two years ago!?!

[bryanthompson]

I've gone to H&R since I started needing to do taxes back in 1999. They've always found stuff for me, and this year was the best of all. Since I'm a full-time student, living at home, and my parents made too much money this year to qualify for the earned income credit for the other kids, I was able to claim them, since I do a lot of the work to help out. If you help them get to/from school, cook meals, etc., and basically are one of the main caregivers, and you live at home, you can qualify for it. I questioned how safe it was to do this, but my tax lady called H&$ Headquarters (?) and got verification that I met the requirements. Long story short, $5k came my way

Also, if there's ever a problem with your filing, it's H&R's ass. They have to go to bat for you with lawyers and everything.

[stomachmonkey]

Plead the 5th but uhm, yep, that's about right.

[RallyJon]

A good accountant will incorporate your tolerance for risk into his strategy. If the IRS disagrees with him, will you:

1) pay what you owe and interest
2) pay what you owe, penalties and interest
3) pay what you owe, penalties, interest and a fine
4) go to jail

Regardless of whether your tax preparer says he'll fight for you, when the bill comes due you're the one writing the check.

[skipdup]

Since I was a child (no funny comments welcome here) I have proven I WILL get caught. So no, I follow to the letter and even probably over pay.

But, I sleep very well at night.

- Skip

[widebody911]

On my '03 taxes, $100 of my IRA contribution was mistakenly applied to the wrong tax year. The IRS caught it, and between the taxes, penalties, and interest, I owed $700+!

I think catching stuff like this will be more common as they get their computational act together.

[lendaddy]

Skip, I'm prtty much the same way. And to clarify, I'm not saying "Can I get away with this or that" so much as I did not know you could actually write some of this stuff off!

Ok, for instance if you run a home business like daycare and you get to write off 43% of your home expenses....odds are you will never show a paper profit on the company. The IRS is cool with this? I mean you're not lying, it's just the way they designed the system.

Also, if I have a home office which takes up say 12% of my home, can I really deduct 12% of ALL my homes costs? Even mortgage payments? Electric bills, heating, etc....... I just want to be sure I understand this.

[stevepaa]

Joel,
that sure sounds like a bunch of lies to me. I have always done my own taxes and can say that what I put down is accurate as best as I can understand from the tax pamphlets, and my issue was with a stupid limited partnership I got into in the early 90's. I now use Turbo Tax

Bryan,

"The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable Federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

The Earned Income Tax Credit (EITC) is a refundable Federal tax credit for eligible individuals and families who work and have earned income under:

$11,490 ($12,490 if married filing jointly) if there is no qualifying child
$30,338 (#31,338 if married filing jointly) if there is one qualifying child
$34,458 ($35,458 if married filing jointly) if there is more than one qualifying child.

You cannot be a qualifying child of another person."

So you are living at home, doing chores, and claim this credit?

Maybe this is how HR Block can say in their commercial that they can find on average $1500 in tax savings.
What a load.

Man, I guess I am just the stupid sucker who pays his taxes with the best intention to the intent of the code and not find loopholes to exercise my greed, cleverness and basic dishonesty.

Yeah, this kind of stuff gets me riled.

[stevepaa]

Joel
on business use, you need to go to irs website and read the docs. There are limitations. There are probably worksheets there to help.
http://www.irs.gov/publications/p587/ar02.html

[lendaddy]

Thanks Steve, looks like fun reading

[MikeSid]

I drove with noisy chain tensioners and wrote off my rebuild as a gambling loss.

[lendaddy]

Originally posted by MikeSid
I drove with noisy chain tensioners and wrote off my rebuild as a gambling loss.

you can only write off gambling losses up to the amount of income from gambling winnings

[MikeSid]

Originally posted by lendaddy
you can only write off gambling losses up to the amount of income from gambling winnings

I was speeding at the time and didn't get caught!

[dd74]

Originally posted by TerryBPP
I plead the 5th

Hilarious!

[ubiquity0]

Wow! I've always done my own taxes. This year I felt a little guilty about not bothering to enter one of my 1099's (a savings account that made a huge $12 in interest ).

It sounds like fudged tax returns to get net payouts from the govt. is the new 'state welfare'. Luckily govt. spending is low

[skipdup]

Originally posted by MikeSid
I was speeding at the time and didn't get caught!

Too funny!!!

[skipdup]

Originally posted by skipdup
But, I sleep very well at night.
...

You know what, I lied. I just finished my taxes and I'm horrified that I made a(n honest) mistake. Hopefully Quicken kept me legal.

I probably will not sleep so well tonight.

- Skip

[wludavid]

Originally posted by stevepaa

"The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable Federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

The Earned Income Tax Credit (EITC) is a refundable Federal tax credit for eligible individuals and families who work and have earned income under:

$11,490 ($12,490 if married filing jointly) if there is no qualifying child
$30,338 (#31,338 if married filing jointly) if there is one qualifying child
$34,458 ($35,458 if married filing jointly) if there is more than one qualifying child.

You cannot be a qualifying child of another person."

So you are living at home, doing chores, and claim this credit?

Since Bryan's not a qualifying child, it seems that he can claim this credit.